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A deposit of $1,000 is made in a bank account, compounded annually, at
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29 Oct 2023, 23:07
29 Oct 2023, 23:07
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Question Stats:
61% (01:01) correct
38% (01:49) wrong based on 13 sessions
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A deposit of $1,000 is made in a bank account, compounded annually, at a rate of r percent.
The amount accumulated after two years is greater than $1,210.
A) Quantity A is greater.
B) Quantity B is greater.
C) The two quantities are equal.
D) The relationship cannot be determined from the information given.
The amount accumulated after two years is greater than $1,210.
Quantity A |
Quantity B |
r |
10% |
A) Quantity A is greater.
B) Quantity B is greater.
C) The two quantities are equal.
D) The relationship cannot be determined from the information given.
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Free Materials for the GRE General Exam - Where to get it!!
GRE Geometry Formulas
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Re: A deposit of $1,000 is made in a bank account, compounded annually, at
[#permalink]
08 Dec 2023, 15:48
08 Dec 2023, 15:48
Expert Reply
Re: A deposit of $1,000 is made in a bank account, compounded annually, at
[#permalink]
10 Dec 2023, 10:09
10 Dec 2023, 10:09
1
The formula for total amount for Principal amount P, compounding once every time period t at rate r % is:
Total amount = P*(1+r/100)^t
Substituting values,
1210<1000*(1+r/100)^2
1.21<(1+r/100)^2
1.1<(1+r/100) or -1.1>(1+r/100) (Inequalities for square roots)
.1<r/100 or -2.1>r/100 (disregarding this inequality as rate of interest can't be negative)
10<r
so, r>10%, hence option A
Total amount = P*(1+r/100)^t
Substituting values,
1210<1000*(1+r/100)^2
1.21<(1+r/100)^2
1.1<(1+r/100) or -1.1>(1+r/100) (Inequalities for square roots)
.1<r/100 or -2.1>r/100 (disregarding this inequality as rate of interest can't be negative)
10<r
so, r>10%, hence option A
